Putting an effective ecommerce shipping strategy in place is one of the most impactful steps you can take to grow your business online.

While many brands start out in ecommerce by taking a simplistic approach to shipping –– like offering free shipping across the board or showing unmodified UPS or USPS rates –– the most successful merchants use strategic shipping options to differentiate themselves from their competition and increase margins.

Of course, while shipping can be a powerful point of differentiation for your brand, it’s important to make sure that your company can actually act on the strategy.

This requires coordination between multiple teams within your organization, all the way from your marketing team to your fulfillment team –– and several others in between.

Establishing a shipping strategy for your online store lets you ensure that everyone involved in this pipeline knows what’s going on and their part in the process.

In this guide, we’ll walk you through the absolute must-haves and must-knows for a solid ecommerce shipping strategy that makes both your margins and your customers happy.

Ecommerce Shipping Best Practices

Be sure to assemble the right team: Every department in your organization has a job in relation to making shipping work for your online store.

Set clear goals: Do you want to increase margins? Go international? Define your goals and measure against them.

Choose a shipping strategy: There are 4 main options, and free shipping isn’t always the best.

Make the leap: Implement and iterate. That’s the only way you’ll get better.

Let’s dive in.

1. Assemble the right team.

Identifying the right people to help make this decision for your business is the first step.

This requires that you bring into the conversation the right stakeholders within your organization.

Here’s a quick breakdown on how to think through the process and pull in the appropriate stakeholders.

2. Define the goals for your shipping strategy.

Once you’ve identified the key teams in your company who will need to be involved in establishing your strategy, you need to define what you want to accomplish with your ecommerce shipping strategy.

There are many areas of focus here, but the most typical are these.

Ecommerce Shipping Strategy Goals:

Increase conversions.

Increase average order value.

Expand market or target audience.

Decrease costs.

Improve operational efficiency.

3. Choose between ecommerce shipping solutions and options.

Once you’ve identified the right team and goals for your business, it’s time to get down to the work of choosing a strategy that is going to work for your team to accomplish the goals you’ve set.

We’ll identify a number of available strategies here with the pros and cons for each.

None of these are exclusive of one another and most successful online store will implement several of these options to form a complete strategy for your unique scenario.

First and foremost, though, as the ecommerce manager or project owner for shipping strategies, you need to approach the business understanding key elements of the shipping industry.

Here are the crucial considerations you must take into account.

3 Crucial Shipping Considerations

From the hundreds of surveys, polls and studies published each year on ecommerce, one thing is clear:

Offering the right shipping rates and options to your customers is crucial to your success as a retailer.

Getting this piece right can make the difference between losing a customer if you charge too much and losing your shirt if you charge too little.

And it’s not just cost that makes a difference. Offering the right shipping options to your customers at the right times plays a critical role in reducing cart abandonment and increasing revenue.

Taking full control of your online store’s shipping means that you can offer the lowest shipping rates possible, still cover your costs, and offer the options your customers want.

Here’s a quick list on how to properly think through what you can offer, including when and why, to maximize sales and decrease costs.

The most important factors to consider when taking control of your shipping can be broken down into three areas.

3 Most Important Ecommerce Shipping Considerations:

Shipping destinations: Where are you shipping to –– domestic or international?

Shipping options: What are the best shipping services or carriers for your unique needs?

1. Product size and weight.

The first of these, product size and weight, is often the easiest to get your head around and has the biggest impact on the approach you take.

If your products are relatively uniform, then going with a per-item, zone-based approach, where the shipping price varies by your customer’s location and not by product size or weight, works well.

This is also a great place to build easy to understand promotions like $10 shipping per order, $5 shipping per item or even free shipping over $50.

For retailers with varying sizes and weights among your product set, getting rates directly from a carrier like UPS, DHL, Australia Post or others is a great way to ensure the rates you’re offering to your customers are the best possible ones.

The important thing to focus on here is making sure your products have accurate weights and dimensions so that the rate you get back from a carrier is as accurate as possible.

To do this, break your products into groups and focus on getting product weights and dimensions for the heaviest or largest 20% and smallest or lightest 20%.

This will have the biggest effect on your shipping rates and offer the best return on investment.

2. Shipping Destinations

Shipping destinations can be just as crucial as product dimensions and weight.

Again, in a simpler scenario like domestic shipping, a flat-rate or free shipping option works well.

To step it up a bit, set rates based on zones. For example, if you’re located in New York, offer a cheaper rate for the mid-Atlantic region and increase the rate as you radiate out from there.

Pro Tip

Shipping internationally normally necessitates getting a rate straight from a carrier like the USPS, DHL or others. Rates can vary significantly even in neighboring countries and it’s difficult to build your own rates for these scenarios.

3. Shipping Options

Look beyond the big-name carriers and you’ll find a world of opportunity to offer same-day delivery, next-day delivery or timely and cost-effective delivery for even the largest items.

In major cities, you’ll often find local delivery and courier companies that will deliver more quickly to your customers than the big carriers at very competitive rates.

Top Ecommerce Shipping Options:

Free in-store pickup

LTL freight carriers

Same-day delivery

Free shipping

Pro Tip for B2B

If you’re shipping especially large items or do a lot of large B2B shipments, using an LTL (Less Than Truckload) freight carrier becomes a necessity.

Local couriers often don’t offer a way to fetch rates in real time for shipments, but it can be worth your while to build up a table of rates based on number of items or weight in order to offer these options to your customers.

The important thing when looking at any alternate ecommerce delivery option is to make sure that you control when and where it’s shown.

If you’re based in Sydney, you probably don’t want to show your local delivery courier as an option for a customer from Paris.

The same can be said for showing an LTL freight carrier as an option for someone who orders a single t-shirt.

Taking control of your online store’s shipping ensures that you aren’t leaving money on the table or risking your success by charging too little. Even small changes here can pay enormous dividends in cart conversion, controlling shipping costs and delighting customers.

How to Ship Items Sold Online:

Make an online sale.

Determine which products to package and the total size and weight.

Confirm the shipping destination.

Determine which shipping carrier is being used and calculate the shipping cost.

Send the package out via the appropriate carrier.

Your 4 Ecommerce Shipping Options

Now that you have all of this considered, you’re ready to face the gamut of questions and potential push back from other teams.

Here are your shipping options and strategies available.

Top 4 Ecommerce Shipping Options

Free shipping

Flat rate and table rate shipping

Live rates from a carrier

Mixed and alternative strategies

1. Free shipping.

Free shipping may seem like the simplest strategy and it’s grown massively in popularity since Amazon introduced free shipping for orders over $25.

Free Shipping Benefits:

It’s easy to explain to customers.

It responds to customer expectations.

It has a positive effect on conversion rates for customers who make it to your checkout funnel.

Of course, free shipping may be free to your customers –– but not to you.

You’ll still need to pay the carrier and you’ll have to make sure you’re making enough on each order to cover the associated shipping costs.

This is why you’ll see that most companies (Amazon included) only offer free shipping over a certain price point and only on specific products.

If you choose to offer free shipping, it’s vitally important to understand its impact on your bottom line. Even if you’re making more sales, if you’re losing money on each one it’s of no benefit to your bottom line.

The most effective approach to free shipping is to only offer it for orders where you know you’re making enough on the sale to cover shipping and still make a profit.

This means setting a free shipping order subtotal threshold that makes sense for your business and, maybe, excluding products that are too heavy or bulky for you to offer free shipping on.

We’ll dive more into exactly how it implement free shipping for your business later in this article, if that is the route your team chooses.

2. Flat rate & table rate shipping.

One extremely effective way to avoid some of the challenges of free shipping is to go the flat rate or table-rate route.

What is flat rate shipping?

Flat rate shipping is something like $10 shipping regardless of order value (see, for example, Overstock.com, who charges $2.95 to most locations in the United States).

What is table rate shipping?

Table-rate shipping is a bit more complex, but doesn’t have to be much more so.

Customers in certain regions, like the United Kingdom, prefer table-rate shipping versus being charged a live rate. For example, a merchant with a warehouse in London might charge customers near the city a certain amount, say £5 per order, with rates going up to £10, £15, etc. as you get further away from the fulfillment center.

You might also charge based on the order subtotal ($10 for orders up to $50 in value, $5 for orders up to $100, and free for orders over $100). Alternately, you might charge a different rate for certain groups of products or set rates based on the order weight.

3. Live rates from a carrier.

If the most important factor for you is to offer the best possible rate while still covering your costs, getting live rates in real-time directly from a carrier like UPS, FedEx or DHL may be the best way to go.

While it’s harder to use this approach as a promotional tool (the rates may vary significantly depending on what the customer orders and the distance from your warehouses to the customer), you can ensure that you’re offering the cheapest possible shipping option by charging your customer exactly what you’ll be charged by the carrier.

Especially if you’re in a market where many of your competitors are offering live rates, it may be important to do so.

This means that for lightweight orders or customers located near your warehouses, you can often offer significantly cheaper shipping than your competition while still making sure your costs are covered.

Of course, it doesn’t have to be as simple as plugging into a carrier like UPS and showing exactly what UPS returns for each order.

You can add a surcharge if you want the shipping charge to cover things like packaging and your cost of fulfillment. You can also discount the rate returned to be that much more competitive over others in your market.

4. Mixed and alternative strategies.

While these three options are the most popular and frequently used, thinking outside the box and mixing and matching these approaches can be extremely effective.

This allows you to balance your revenue needs with promotional opportunities.

For example, offer free standard shipping (with no delivery commitment or a range commitment like 5-10 business days for delivery) alongside other options like Expedited shipping (for example, 3-5 day delivery at a table rate based on order value) and live rate options for Second Day and Overnight delivery.

Here’s are a few great options.

Best Ecommerce Shipping Alternatives to Free Shipping:

Standard shipping + Expedited shipping

Free shipping + Standard shipping + Expedited shipping

Standard shipping + In-store pick up + Same day delivery

LTL freight + Standard shipping

Pro Tip

In addition to these most popular approaches, offering additional, less orthodox options can help you stand out from the crowd.

9. Using an ecommerce shipping solution.

It’s the most advanced shipping rate calculator and manipulation platform in the world and is all about the rating.

Most shipping software out there will focus on that label, the last mile, first mile and all around shipping fulfillment. But they don’t care about the customer experience, and frankly they should, because that’s where it all starts.

At ShipperHQ, we do care. We put the merchant front and center. There is no right solution here –– it’s merchant specific. With knowledge and the right partner, you can achieve what you need for your store.

Shipping is pretty interesting, and it should be a big part of your online strategy. Remember though: it’s your cart, your shipping and your rules. Be agile, learn, improve and iterate.

In Asia and India –– two of the fastest growing markets for ecommerce, with YoY growth in the 30 or more percentile –– marketplaces similar to Amazon and eBay make it easy for international companies to test product market fit.

Now, how do you bring those customers back to your site to purchase once you’ve determined demand?

Many online stores find shipping items internationally nearly impossible given the regulations, rules and risks associated with each country.

To overcome that initial fear of international shipping, it is important to know what shipping options and fulfillment services provide low costs and risk.

Once you have a clear understanding of how international shipping works, and you’ve researched the services that best fit your company and put an international shipping strategy in place, you will be able to open your online storefront to a global audience and break into the global market.

Here are the top considerations you must go through before you launch an international shipping strategy.

5 International Ecommerce Shipping Considerations:

Are your products suitable for international shipping?

Is there international demand?

Which shipping services will you use?

Do you know about harmonized tariff codes, duties and taxes and more?

Watch out for restrictions!

Shipping internationally opens your market to a potential three billion consumers. But, before you build your international shipping strategy, you should determine if it is right for you.

You don’t want to put time, effort and money into this if you aren’t going to come out with profit.

Here are a few things that come into play with international ecommerce shipping.

1. Is my product suitable for international shipping?

Know what it takes to ship your products out of the country –– or if those products are even suitable for such long distance shipping. Ideally, you ship items that are sturdy and compact to avoid an item breaking in transit, which can leave a bad customer impression.

If you are shipping perishable goods or large items, you may want to keep these items solely available to your domestic customers.

It is also important to be aware of any import and/or export restrictions subjected to the product and specific countries. Here’s a short list of items prohibited from international shipping:

Aerosols

Air Bags

Alcoholic Beverages

Ammunition

Cigarettes

Dry Ice

Explosives

Fresh Fruits and Vegetables

Gasoline

Nail Polish

Perfumes (containing alcohol)

Poison

This should not stop you from shipping internationally, though, and we’ll go over how you can restrict items from shipping to certain destinations in a bit.

2. Is there demand for my product?

Do the research! It is pretty easy to determine if there is demand for your product if you have already had requests from international customers.

But, if you don’t have the luxury of knowing who already wants your products, you should look into what is currently being offered in countries you want to ship to. Try to find out if there are similar products being sold and what the competitors are doing.

In the same way you’ve built your national audience, you’ll want to access the competition and get your goods in front of your target audience.

But, international consumers shop differently than you are used to.

In Asia, for instance, Rakuten outpaces Amazon. If your goods sell well in the U.S. on Amazon, consider placing your product on Rakuten to test out market fit and demand.

Here are larger international marketplaces to keep your eye on as you expand. These are great places to test out your product offering before launching a site-wide campaign targeted to international customers.

Rakuten: Asia, especially Japan, though the company is expanding outside of Asia as well, B2C marketplace

Taobao: Asia, China in particular, B2C marketplace (the B2C side of Alibaba)

Snapdeal: India, B2C marketplace

Flipkart: India, B2C marketplace

Amazon India: India, B2C marketplace

Mercado Libre: Latin America, B2C marketplace

3. Choosing the right service.

Determining the best way to ship internationally comes with its own obstacles and you should do your research before opening your gate to the world.

Some important factors such as shipping costs, tracking, delivery times and guarantees will come into play when you are looking into services.

One service does not fit all. Know what international shipping service is the best fit for you and your customers’ needs.

Here is what to think through when identifying the best international shipping solution for your business.

International Carriers

This could be a good choice for smaller companies because you will have the backing of a large company such as UPS, FedEx and DHL. These companies have years of experience in shipping both internationally and domestically.

With international carriers you will experience a higher level of international shipping services as they offer door-to-door tracking and guarantees in pricing.

Since they are a larger company, their prices tend to start out higher, but there are options for negotiation.

National Carriers

This is the in-between option of international carriers and international freight forwarders.

National carriers, such as USPS, Australia Post and Canada Post, focus on servicing a specific country.

These companies normally offer lower prices than international carriers but you won’t have the detailed door-to-door tracking that you will find with the other carrier services.

International Freight Forwarders

An international freight forwarder manages your shipment from beginning to end.

This is a good option for merchants with a larger shipping budget as the prices are slightly higher than international and national carriers.

This service will make breaking into the global market a little easier, and is is just about as simple as if you were shipping domestically. You send the package to the international freight forwarder’s hub and they take care of preparing and processing customs and other documentation involved in shipping internationally.

4. Know the correct shipping terminology.

No matter what route you take when choosing a service for your international shipments, it helps to know some of the terminology so you can have educated conversations with carriers.

Here are some key terms you should know to ensure you keep your new global customers satisfied and avoid any unwanted surprises –– for you or your customer.

Harmonized Tariff Code

Each of your products will have a harmonized tariff code which is required when preparing your commercial documents. This code indicates the description of the product and is legally required in many countries.

If you fail to put the correct code for a product, your shipment can be delayed or could result in higher duty and taxes. If you are unsure what code goes with a certain product, you can use the HTS search here to figure it out.

Customs Documentation

You will be required to complete documents for your international shipments. The set of documents you need to complete are dependent on the details of your shipment.

These documents include:

Commercial invoice: The commercial invoice determines the true value of the product you are shipping and is used when calculating the duties and taxes. This is completed by the exporter and is required by the foreign buyer to prove ownership and arrange for payment.

Export declaration: The export declaration is a form that provides information on amount, nature and value of your product to the statistical office for compilation of foreign trade data and serves as an export control document.

Certificate of origin: The certificate of origin is an official document authenticating what country a shipment has come from and is prepared by the exporter.

Duties and Taxes

Duties and taxes are imposed by the country importing the shipment to generate revenue and protect local industries against foreign competition.

These are usually paid before the goods are released from customs and are based on product value, trade agreements, country of manufacture, use of the product and the product’s harmonized system code.

These fees can be paid by the customer (delivery duty unpaid), or the merchant (delivery duty paid). It is important to know the difference between the two before you make your first shipment as you don’t want to unknowingly leave your customer with additional fees when they receive their package.

With delivery duty paid (DDP), you as the merchant are responsible for paying all duties and taxes. This includes all costs from your warehouse to the end destination such as transportation, customs clearance and handling expenses. The delivery duty will be paid by the carrier and that bill will be sent to you. If you have the means to do this, it is a much better option as it results in a richer experience for the customer.

In contrast, deliver duty unpaid (DDU) requires payment from the recipient. You will still be responsible for transportation costs, but the customer is then responsible for paying the duty and other clearing expenses upon arrival. If the customer is not made aware of this beforehand, it can lead to a sticky situation and a very unhappy customer. If you use this method, be clear on product pages that this is the case. Do not wait until after shipment to alert the customer.

5. Beware of shipping restrictions.

You may find that some of your products are legally restricted from being imported to certain countries or it can even be illegal to export the product from your country.

You wouldn’t believe some of the items we have found to be restricted from certain locations!

It is important to remember that customs has the right to stop the shipment of any package.

Don’t let this scare you off from breaking into the global market. You will just need to make sure you take these restrictions into account when you begin strategizing the shipping methods and options you want to use.

You can carry out these restrictions by using options embedded into your platform.

For instance, use customer groups to allow shoppers from various countries to buy only those products you know you can export.

This gives you more control over the product offerings you display for those groups –– and allows you to collect email addresses to better market to that segment.

For a more sophisticated option, look into using a shipping rate management software such as ShipperHQ. These programs will automatically take into account a customer’s final shipping destination and alert them to issues with any items in their cart based on their location, or updated shipping prices (including DDU, if applicable) on the checkout page.

Either way, you will need to have the ability to enable restrictions for products based on origin and destination of shipments in order to scale your international selling.

In all, breaking into the global market can seem a bit overwhelming, but once you take the leap, you’ll open your business up to a larger purchasing audience, significantly increasing your sales and revenue.

There is a whole world out there potentially searching for your products. With a few steps and a smart strategy, you can be there to answer their search.

Making the Leap: Implementation & Analysis

With the right team in place, your goals clearly defined, and your approach or approaches chosen, it’s time to implement your ecommerce shipping strategy.

Each team member or team leader should be clear on their responsibilities. You don’t have to do everything all at once, but everyone should be clear on their duties each step of the way.

Your marketing team should be ready to communicate your new approach to your customers and potential customers

The web design or development team should get your site set up to offer these new options

Your fulfillment team should be ready to make use of your new options and know how to handle each option the customer chooses

Your customer service team should be educated in the benefits of each option you’re now going to be offering your customers.

Shipping Solutions for Ecommerce Sellers

You aren’t alone when it comes to shipping hassles. You also aren’t alone when it comes to finding the right solutions. There are plenty of them. There are businesses that dedicate their entire staff to helping you figure out how to ship faster and more affordably.

Each of these solutions helps with a variety of things, but most offer:

Once your new approach is live, make it the responsibility of each team to report on how well things are going for them.

Often, a new approach will take some time to nail down, so if you have the evidence to back up your changes, be prepared to stick with it and make some adjustments as you go.

Want more insights like this?

We’re on a mission to provide businesses like yours marketing and sales tips, tricks and industry leading knowledge to build the next house-hold name brand. Don’t miss a post. Sign up for our weekly newsletter.

Ashley works in Marketing and Sales at ShipperHQ and dedicates her time to educating merchants on the opportunities ShipperHQ can open for their online business. She is a proud graduate of The Ohio State University, where she fell in love with the study of strategic communications and marketing.

nice information but too bad there’s no negotiation for European shops,

Johanna Villasmil

Hi, i have a big ecommerce and somethings I need to sent something really big like on a container, but I still don’t know with whom. Do you know any great company? I only know one http://www.kingocean.com but I don’t know if its good.

Very informative. Thanks for sharing this blog. I think customer satisfaction is the major objective of e commerce shipping and free shipping can be useful to increase online sales volume. Regards, threelineshipping.com

Global Exchain

Found your blog. Its really nice on courier. I appreciate your article. Its important to get quality courier services. So thanks for sharing all that important information.

Such a great blog that provide an Idea for ecommerce shipping in order to have a better choice for shipping, These tips is really useful in order to keep products safe throughout the shipping process till destination.Thanks !

That was extremely informative for me “Free shipping is the holy grail of online eCommerce.” Latterly we are going to start an eCommerce Business but little worried we were about this shipping. I have gathered some excellent, helpful tips in this shipping. Thanks. There is another issue that payment system in this Online eCommerce.

Martin Atayo,CEO/Technologist

Awesome, Karen..well spelt out !!

Excelsior PH

Very nice blog Karen. Learned a lot from your post.. Having a tailored carrier that suits your needs is like having a business partner that can provide an excellent service to the company. For more info visit, https://excelsior.ph/

Excelsior PH

Very good blog and well researched. I like the part where you tackle how to handle the free shipping. Learned a lot fro this post. Thanks a lot for posting! For more queries on shipping, visit https://excelsior.ph/

Completely agree, @disqus_TWZfY1EFGX:disqus! Even in working to launch my own business, I’m finding that shipping costs (from supplier to me, and from me to customer) are just plain insane. This post really helps to explain and how to think through options other than free shipping. Thanks for reading!